CBDT notification cannot restrict a statutory deduction for superannuation fund contributions under the Income-tax Act.

A CBDT notification cannot curtail a deduction expressly granted under the Income-tax Act, 1961. On the question whether employer contributions to an employees' superannuation fund were governed by the CBDT notification dated 21 October 1965, the Bombay HC, following CIT v. Sirpur Paper Mills, held that the statutory deduction prevails over the notification. The notification could not restrict the assessee's entitlement under the Act, and the issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether contribution to the employees' superannuation fund was governed by the CBDT notification dated 21 October 1965 and whether the notification could restrict the deduction available under the Income-tax Act, 1961.

Analysis: The issue turned on the effect of the CBDT notification on the statutory deduction claim. In view of the Supreme Court's ruling in CIT v. Sirpur Paper Mills, the notification issued by the CBDT could not restrict or curtail the deduction granted by the Income-tax Act, 1961. The statutory entitlement therefore prevailed over the notification.

Conclusion: The issue was answered in favour of the assessee and against the Revenue.

Ratio Decidendi: A CBDT notification cannot curtail or restrict a deduction expressly granted by the Income-tax Act, 1961.

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